Four Tools to Support and Simplify Your Export Business

International finance

Import-export

Commercial lending

SBA loans

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Written by: Debbie Gelbach, VP, International Banking Manager

If your company exports goods or services, you know international commerce offers its own challenges and opportunities. Navigating those avenues gets a lot easier when you have the right tools and expertise to guide you.

Here are four helpful tools that can add savings, security and peace of mind to your export business:

Export Letters Of Credit – This payment method has a prominent place in today’s global marketplace. Issued by a bank in a foreign country at the request of your buyer, a letter of credit ensures you are paid in full for goods shipped, as long you adhere to conditions set in the document. The bank’s guarantee of payment reduces risk of buyer nonpayment.

Documentary Collections – A low-cost payment option for international shipments. With these bank-to-bank transactions, the buyer’s bank acts as an escrow agent and holds title to the shipment until the buyer makes payment. The documents are sent to the collecting bank with specific instructions which must be followed before the title can be released.

Wire Transfers – International wires offer an inexpensive way to send or receive payments globally. As an add on to these wires, exporters can mitigate risk of buyer nonpayment by obtaining export credit insurance through the U.S. Export Import Bank or a credit insurance company.

Government-Backed Export Financing – Many guaranteed loan products exist to help businesses obtain capital to sell goods in another country. For example, the U.S. Small Business Administration (SBA) offers the International Trade Loan and the Export Working Capital Loan. Designed to promote exporting, these programs provide up to $5 million in capital, and offer a 90 percent loan guaranty to a bank, reducing the risk lenders might face with respect to trade finance.

The International Trade Loan can be used for equipment purchases, working capital, debt refinance and many other purposes. It can be ideal if you’re just getting into exporting or have a small number of exports.

The Export Working Capital Loan provides working capital, purchase order or contract financing and other support. The entire loan must be used for export purposes.

A banker who understands your company and your industry can help determine the best options for you. Whether you are an experienced exporter or just dipping your toes into overseas trade, you’ll benefit from working with a bank that has a team of trade finance experts and SBA specialists. Together, they should offer the right type and blend of financing and transnational solutions for the way you do business.

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